Crucial Difference Between Slogan and Trademark Infringement Derails Policyholder’s Bid for Coverage

Boler v. 3D International, LLC (E.D. Cal., December 7, 2015)

The coverage action arose out of a trademark infringement claim with respect to the policyholder’s usage of a term related to its degreaser product. Notably, the underlying plaintiff also manufactured and sold a degreaser and received a registered trademark for its product. The policyholder’s tender of defense to its insurer was denied. The policyholder then filed a third-party complaint in the underlying action against the insurer for indemnification and breach of contract by failing to cover the policyholder in connection with the underlying lawsuit. The insurer’s motion for judgment on the pleadings was granted because the policy only obligated the insurer to defend cases involving slogan infringement, not trademark infringement. Therefore, since the underlying complaint only alleged trademark infringement, the insurer did not breach its insurance policy nor was it required to indemnify the policyholder.